Time To Buy Micro-Cap CymaBay Therapeutics: H.C. Wainwright

In a report published Tuesday, H.C. Wainwright analyst Ed Arce initiated coverage of CymaBay Therapeutics Inc CBAY with a Buy rating and $12.00 price target.

The note looks into several aspects of the company; so, let’s take a look at some highlights.

• The firm believes that “positive FDA guidance on potential labeling for arhalofenate should allow for a collaboration agreement” by the end of the year. The analyst explains that, “Establishing this agreement with the Agency allows for the potential of a label differentiated from other gout drugs, and creates an opportunity for a potential collaboration partner to license the drug for Phase 3 development and commercialization.” In fact, he believes various potential partners are waiting for “the EOP2 meeting results to value and execute such a collaboration.”
• Many of the current gout therapies exacerbate gout flares, and thus, pain, and are contraindicated in many patients.
• Arhalofenate is a novel agent that acts dually -it has uricosuric and anti-inflammatory properties, and has successfully fulfilled a Phase 2b clinical trial to assess its safety and efficacy in treating patients who suffer from gout.
• Lesinurad, a uricosuric drug similar to arhalofenate, should receive FDA approval before the end of 2015. However, Arce notes, its “lack of clear differentiation and renal toxicity risks are likely to constrain commercial uptake.”
• CymaBay Therapeutics has another drug candidate: MBX-8025. This is a new PPAR-δ agonist that “offers substantial market potential across ultra orphan diseases.”

So, the analyst concludes, counting with “two significant mid-stage clinical assets, each with important (and potentially catalytic) milestones by year end,”

CymaBay Therapeutics is, in H.C. Wainwright’s opinion, substantially undervalued at a $61 million market cap.

Shares of CymaBay are up more than 20 percent on Tuesday trading.